I'm in the process of acquiring a credit line on a property. I'll have a $200K credit line soon. I know I could do a BRRR with a property under $200K but what if the property is over the $200K mark. How best do I use this credit in purchasing a property for let's say $400K? My credit line has to be paid back within 12 to 18 months. Thanks for your help!
OK. BRRRR is tough, and BRRRR is expensive. And BRRRR is extra tough right now. You have to find a great deal - usually off market - and be able to add significant value via the rehab. And you have to factor in all of the costs that get ignored on BP - closing costs, holding costs, refi costs. And then when you refi your interest rate is going to be high, making it tough to cash flow.
I'd start small and wait until you find something that works.
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
3y
I would first do a BRRR sub 200K to get your feet wet. If you do have extensive experience then you could use the credit as a DP possibly. Not sure if you can utilize a hard money/private money lender
OK. BRRRR is tough, and BRRRR is expensive. And BRRRR is extra tough right now. You have to find a great deal - usually off market - and be able to add significant value via the rehab. And you have to factor in all of the costs that get ignored on BP - closing costs, holding costs, refi costs. And then when you refi your interest rate is going to be high, making it tough to cash flow.
I'd start small and wait until you find something that works.
Thanks for your input. I think you're right...I'll be on the lookout for a sub $200K brrr. Thanks again
Even if you do: look to see if you can qualify for a loan for $150k , $200k , 300k or $400k with 25% down.
Use the 25% with the credit line and the rest will come from the lender.
Make sure the rents cover : the credit line payment + the mortgage payment + costs + cash flow
Or do all of that for a fixer : use the rest of the funds to renovate and holding costs then refinance with conventional loan or DSCR loan and rent it out.
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